Legal & Regulatory
India Regulatory Brief: GST Council Expected by November 11 and Changes in the Union Budget Formulation
Goods and Services Tax (GST) Council to be Set Up by November 11
The Cabinet approved the process, formation, and functions of the Goods and Services Tax (GST) Council on Monday, September 12, 2016, following the President’s assent last week to the GST Bill. The Cabinet also decided on the constitution of the GST Secretariat and the respective officers responsible for implementing the decisions of the Council. As per the provisions of the GST Constitutional Amendment Act, the GST Council will get established within 60 days from the date of notification. This means the Council, which will be chaired by the Union Finance Minister and will comprise of representatives from all 29 states and two union territories, will have to be set up by November 11.
By Pritesh Samuel
Globally, the Know your Customer (KYC) process is a way for companies, particularly financial institutions, to verify the identity of their clients. The process is increasingly becoming common to prevent fraud, identify theft, money laundering, and terror financing activities. In India, the Reserve Bank of India (RBI) released KYC guidelines for all banks in 2002 and directed all banks to ensure they were fully compliant with KYC guidelines before December 31, 2005.
The RBI has clarified that banks must reconfirm KYC details every two, eight, or ten years depending on the risk profile of the customer. If a customer wants to open a bank account, they will need to provide one proof of identity, an address proof, and a recent photograph on the KYC form. The Aadhaar card (which represents a unique identification number), driving license, voters’ identity card, or passport serve as identity and address proofs, while a PAN card only serves as an identity proof.
By A&A LAW
The general law governing gambling in India is the Public Gambling Act, 1867. However, states have significant regulatory leeway with gambling laws, as the sector is listed on the “State List” under the Seventh Schedule of the Constitution of India. This explains how a state like Goa has legalized the functioning of casinos within its territory, and Sikkim permits gambling, subject to regulations by the government. States like Assam and Orissa, however, have prohibited any form of betting or gambling.
India Regulatory Brief: New Rules for Income Declaration Scheme 2016, India-Cyprus Tax Treaty, and Surrogacy Bill, 2016
Tax Department Makes It Easier to Admit Tax Evasion
New rules notified by the Central Board of Direct Taxes (CBDT) on August 17 amends the fair market value (FMV) determination rules for immovable property, as applicable to the Income Declaration Scheme (IDS) 2016. IDS was launched on June 1, offering a four month period to enable tax evaders to disclose their undeclared income and assets. Such declarants have to pay the applicable tax, cess, and penalty (amounting to 45 percent of the undisclosed income), to gain them immunity from further penalties or prosecution proceedings under the Income Tax Act, 1961, and the Wealth Tax Act, 1957.
By Pritesh Samuel
India presents a complex economic, regulatory, and legal landscape for doing business. A company’s successful navigation of the Indian business landscape is closely linked to the risk management and mitigation strategy that that the company undertakes.
Companies must also be aware of corporate laws, which are governed by the Companies Act, 2013, as well as several others legal Acts that depend on the industry, such as The Banking Regulation Act. The Companies Act discusses laws related to mergers and acquisitions, board room decision making, party transactions, corporate social responsibility, and shareholding.
India Regulatory Brief: Maternity Leave to Increase to 26 Weeks and New FDI Rules for Non-Banking Finance Companies
Maternity Leave to Increase to 26 Weeks for Working Women in the Organized Sector
The Maternity Benefit (Amendment) Bill, 2016 was passed in India’s upper house of parliament on August 11. It will be applicable to female workers in the formal sector, in all establishments employing 10 or more people. A notable feature of the amended Maternity Benefit Bill is the increase in maternity leave for working women from 12 weeks to 26 weeks. This leave can now be availed before eight weeks from the date of expected delivery, instead of six weeks as was the case previously. However, in case of a woman with two or more children, the maternity benefit will continue to be 12 weeks, which cannot be availed before six weeks from the date of the expected delivery.
By A&A LAW
The article discusses the extent of liabilities faced by directors and shareholders in event that a company defaults on its loans. Further, it details the manner by which a ‘wilful defaulter’ is recognized by the Reserve Bank of India (RBI).